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Two Secrets To Help You Save Money on Tenant Debt Collection

Debt photoMany landlords hold on to their tenant debt because they believe the hassle of collection, especially the cost, outweighs the gain. Why bother when you stand to lose 50% of anything you recover to collection costs anyway?

But you may be able to collect tenant debts quickly, and much cheaper than that, if you know these secrets:


Secret #1

Collection companies earn the most for their efforts when the debtor responds from a few targeted collection letters. It’s the stubborn debtors (that take years of effort to collect) who are difficult and expensive for collection agencies. That’s simple enough, right? But few landlords know that a predictable percentage of tenant-debtors pay right away when they receive threatening letters from a collection agency. The letters alone cost the agency next to nothing, but they still charge the landlord the 50% contingency. That’s called “creaming the easy ones” in the industry, and its how collection companies thrive.

Secret #2

Sending out letters yourself doesn’t usually work too well. Many debtor-tenants don’t pay simply because they think they can get away it. You cannot get the same results as a collection agency – the tenants don’t take your actions seriously. Demand letters must come from a collection agency.

There is an alternative to contingency fee tenant debt collection. One national debt collection provider offers a “self-service” option, where the landlord can order collection letters. It’s as simple as entering the tenant information. This triggers a series from one to three demand letters from a well-respected tenant debt collection agency. If the debtor pays, you keep 100% of the recovery. And if they don’t? You can still turn the debt over for collection on a classic contingency fee basis. For more information on this flat-rate letter package, visit click on ˜Flat Fee Based Collection.

American Apartment Owners Association offers discounts on products and services related to your commercial housing investment, including tenant debt collection, tenant background checks, insurance and financing. Find out more at

For more on debt collection, read our series feature blogs, Seven Vital Tips to Help Collect Tenant Debt.

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